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Brussels, 22 nd July 2009

State aid: Commission endorses Austrian aid to green electricity producers; opens in-depth inquiry into potential aid for large energy users

The European Commission has authorised under EC Treaty state aid rules subsidised feed-in tariffs in Austria for producers of green electricity (i.e. electricity produced from environmentally-friendly sources). The measures are designed to accelerate and increase the development of electricity production from renewable energy sources without granting over-compensation for extra costs incurred. They are therefore in line with the requirements of the Environmental Aid Guidelines (see MEMO/08/31 ). At the same time, the Commission has opened an in-depth investigation to establish whether certain provisions of the new Austrian Green Electricity Act, which may favour large energy consumers, infringes the state aid rules. According to the new Act, energy intensive industries may be exempted from their obligation to purchase green electricity and to contribute to the funding of green electricity in Austria. As a result, enterprises not qualifying for the exemption may be burdened with extra cost for purchasing additional amounts of green electricity. The opening of an in-depth investigation will allow third parties to comment on the measure under scrutiny. It does not prejudge the Commission’s final decision.

Competition Commissioner Neelie Kroes said: "The Commission supports the development of renewable energy and I am glad that Austria can now implement the feed-in tariffs to support the production of green electricity. However, at this stage, the envisaged exemption of large electricity consumers from the funding of green electricity needs further investigation."

The feed-in tariffs are electricity prices above the market price paid to the producers of green electricity to compensate for their extra costs. The Commission concluded that the measure is in line with the requirements of the provisions of the EU Environmental Aid Guidelines (see MEMO/08/31 ). In particular, Austria has committed to avoid any over-compensation with regard to the extra costs for buying green electricity.

Exemptions for energy intensive users

However, based on its preliminary assessment the Commission has, at this stage, doubts that the proposed exemptions for energy intensive industries would be compatible with the EU state aid rules. In particular, an exemption from contributions to the funding of green electricity may provide these industries with an unfair competitive advantage that does not seem justified by the logic of the system.

The non-confidential version of the decision will be made available under the case number N 446/2008 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News .

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